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  • user 12:29 pm on May 10, 2016 Permalink | Reply  

    What Are Bitcoins Actually Used For Now in 2016? 

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    It’s fair to say that these past few years have been a baptism of fire for , the world’s first and most popular .

    In February 2014, MtGox, which was the largest Bitcoin currency exchange, folded after $460 million worth of Bitcoin was stolen, probably by its founder Mark Karpeles, who has since been arrested for embezzlement.

    Later that year, it was reported that Bitcoin had performed worse than the Russian ruble, which itself had lost 50% of its value that year as a result of international sanctions. Its value weakened further as governments clamped down on “dark web” marketplaces.

    But since then, things have stabilized, and 2016 is looking to be a good year for Bitcoin as it goes from being niche and sinister to something you might actually want to use.

    Bitcoin Is Now a Usable Currency

    Many in the Bitcoin community hope that the cryptocurrency will eventually be used for the buying and selling of everyday things, much like how we use traditional at currency. But the problem is that until very recently, it wasn’t that great at being a currency.

    Wait, what?

    The thing that makes a currency work is confidence. If I have ten dollars in cash, I’m confident that what I can buy with it today, I can also buy with it tomorrow. As a spender, I want to have confidence that its value and power won’t radically change from day to day.

    It’s for this reason why stable currencies — like the U.S. Dollar, Japanese Yen, British Pound, Euro, and Swiss Franc — are used by governments as their foreign exchange reserves: because the value of a currency is intrinsically linked to how much people trust it.

    Bitcoin, by this definition, was not a good currency. From day to day, its value would fluctuate significantly, soaring and dipping. While this is great if you’re using Bitcoin as an asset (so you can gamble on buying low and selling high), it’s not as good if you want to use it as a currency. After all, if you sell a $500 laptop for 2 BTC and the next day BTC loses 40% of its value, you’ve essentially lost $200.

    Bitcoin nowhere near as stable as the U.S. Dollar — over the past month it reached a low of $386 and a high of $445 — but it’s still a marked improvement over its previously volatile state. It’s definitely more stable now than it was before.

    So, what does this mean for users of Bitcoin? Essentially, it has matured to the point where it’s now practical to use it as a currency. Merchants now have confidence in it, and many are happy to accept it in exchange for physical goods like laptops.

    Bitcoin’s Strength: No Capital Controls

    The global financial crisis introduced a whole bunch of new words and phrases into our collective lexicon, like derivatives, subprime, credit default swaps. They are big, scary words with meanings nobody can quite understand. But for ordinary people, one phrase is scarier than the others: capital controls.

    A capital control is when a government places limits on the amount of money that can be taken out of the country or withdrawn from a bank in hard cash.

    We saw it in Iceland in 2008 after their financial system imploded spectacularly in a blaze of smoke and lost life savings. To stem the flow of money leaving the country, Iceland introduced capital controls that prevented people from converting assets held in Icelandic Krona to foreign currencies. These controls were only – and barely – lifted late last year.

    A more recent example happened in Cyprus in 2013 when the government had to bail out their banking institutions from the edge of utter collapse. To prevent a bank run, the government limited ATM withdrawals to 260 Euro per day (later 100 Euro). Other limitations were put in place which affected people’s ability to transfer their money abroad.

    This was very similar to what happened in Greece in 2015 when the specter of their leaving the Euro loomed. The Greek government harshly limited how much cash could be withdrawn from ATMs and blocked all international card transactions. While this arguably saved these institutions, it essentially left Greeks traveling abroad destitute and unable to access their funds.

    Almost immediately after Greece and Cyprus introduced capital controls, there was a surge in the price of Bitcoin. Why? Because Bitcoin was, and is, an unstoppable way to evade capital controls. Bitcoin essentially allowed ordinary Greeks and Cypriots (but mostly Greeks) to move their assets abroad rather than keep them in at-risk .

    It could be argued that Bitcoin’s effectiveness in evading capital controls is what’s driven it firmly into the mainstream in Greece. While Bitcoin ATMs are very much a novelty in most of the world, in Greece they’re about to become mainstream, as according to CNBC, one company has plans to roll out 1,000 of them.

    This goes a long way to explaining the enduring popularity of Bitcoin in China, where they’ve had restrictive capital controls for a long time. The government there limits the amount of money you can take out of the country at $50,000 per year. While that is for most in the working and middle classes, it’s a real problem for the growing number of Chinese ultra-rich.

    A popular way of circumventing this it is to just convert Renminbi to Bitcoin and to take it out of the country on an encrypted USB stick, where you can then just sell it and store it in a foreign bank account far from the reaches of the Chinese government.

    What Can You Actually Buy?

    We talked earlier about how Bitcoin is now a semi-functional currency. (It may not be as stable as the Japanese Yen, but it’s no Zimbabwean Dollar either.) As a result, more and more vendors are flocking to Bitcoin in order to reduce the costs of payment processing and to engage with a tech-savvy audience.

    Computers

    Take Dell for instance, who is perhaps the largest retailer that currently accepts the currency. Its entire catalogue is available for purchase with it, and processing is done through the third-party CoinBase. While Bitcoin undoubtedly represents a tiny part of their sales, if it takes off, it could ultimately save Dell a lot of money.

    Payment processors often take as much as 2.75% per transaction as their cut, while that doesn’t sound like a lot, it is when you’re selling large-ticket items and shifting billions of dollars of stock. Dell’s revenue for 2015 was $59 billion, so 2.75% of that is an unthinkable sum of money.

    Airline Tickets 

    You can also use Bitcoin to pay for services, such as travel. AirBaltic, who is the flag carrier of Latvia, has accepted it since 2014 with a couple of caveats. First, you can only use it to pay for the most basic of tickets. (Forget about booking a business class ticket with Bitcoin.) Second, you have to pay a small fee in Euros for the privilege of spending Bitcoin.

    Another small Baltic-based airline, Air Lituanica, brie y accepted Bitcoin. This airline operated a single Embraer aircraft on just a handful of routes de- parting from Vilinus. Unfortunately, it wasn’t financially successful and the company declared bankruptcy in May 2015.

    Hotel Rooms

    In the same vein, it’s also possible to book hotel rooms with Bitcoin. Cheap- Air (a flight and hotel search engine) has accepted the digital currency since the end of 2013 when it was still trapped in its cycle of boom-and-bust. A risky proposition if there ever was one. In recent years, they’ve even added Dogecoin and Litecoin to the list of cryptocurrencies they accept.

    There’s also a more mainstream hotel booking site that accepts Bitcoin: Expedia. They’ve allowed people to make reservations with it since June 2014.

    Coffee

    Surprisingly, an increasing number of coffee shops are accepting Bitcoin. Some, like the Prague Espresso Bar, Bitcoin Coffee, exclusively accept Bitcoin as payment for coffee, but the vast majority of them accept it in addition to standard at currency.

    While Bitcoin isn’t accepted at the larger coffee chains, like Starbucks and Tim Hortons, there are some services which allow you to spend your digital currency there. One of the biggest is Fold Coffee, which also works at Target and Whole Foods.

    Pizza

    One of the earliest Bitcoin transactions was in 2010, when Florida programmer Laszlo Hanyecz exchanged the 10,000 Bitcoins he had mined for two piping-hot pizzas. If he had held onto them, his coins would have been easily worth over $4 million today.

    Six years later, people are still swapping Bitcoin for stuffed crusts and deep dishes. One service, PizzaForCoins, allows people to order from Dominos, Pizza Hut, and Papa John’s, which some might unkindly call “the trifecta of terrible pizza”.

    Other Stuff

    If you’re not in the mood for any of the things above, you can still spend your Bitcoins on other products at retailers like OverStock, TigerDirect, and New-Egg.

    Bitcoin isn’t for everyone though. While admittedly it’s cheaper to process, and faster than paying through traditional mediums, it lacks some essential consumer protections. For instance, you can’t issue a chargeback for a fraudulent transaction, like you can with a credit card.


    This post express the opinion of the author: Kunal Patel that originally posted it on linkedin

     
  • user 2:38 am on May 10, 2016 Permalink | Reply
    Tags: , , , , , , , ,   

    Consensus Blockchain Standards Panel: Industry Should Take Action 

    The last day of 2016 featured a workshop discussion on for development.
    fintech techcrunch

     
  • user 1:16 am on May 10, 2016 Permalink | Reply
    Tags: , , , ,   

    Ethereum: A Valuable FinTech Sandbox 

    Daniel Cawrey looks at how ‘s potential in experimentation will help bring about a new digital asset-based economic paradigm.
    fintech techcrunch

     
  • user 12:40 am on May 10, 2016 Permalink | Reply
    Tags: , , , Implementing, , ,   

    Workshop Experts Explore Problems in Implementing Blockchain IDs 

    With cell phones and , the creation of a self sovereign identity becomes a reality which individuals can control themselves.
    CoinDesk

     
  • user 11:56 pm on May 9, 2016 Permalink | Reply
    Tags: , , , , , , , , ,   

    In London, Researchers Look at Blockchain Beyond Financial Services 

    CoinDesk speaks with a senior researcher from Imperial College ‘s R&;D efforts.
    fintech techcrunch

     
  • user 10:54 pm on May 9, 2016 Permalink | Reply
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    Open Letter: Open Standards & Consensus Ledgers 

    The history of how have developed in the Western World is a valuable source of information for the future of Ledger ( tech for most everyone else, I know I am stubborn and contrarian). I have previously written on my blog about the necessity of open standards in the crypto space and am doubling down with this open which is a cry to arms.

    Engineers of all stripes &; mechanical, electrical, chemical&; &8211; got together in the United States and the UK to create open standards in the 19th century. They tinkered, tested different paths and settled on a consensus method out of which the current organizations in charge of creating and managing standards emerged.

    There are roughly four methods to create open standards. Two of them are hierarchical and fiat driven, one is market driven and the last one is a hybrid.

    The first two methods are a) legislative and b) regulatory driven. These bodies are administrative and bureaucratic, highly hierarchical and deliver mandates for the creating of open standards. The results are usually poor and sub-optimal. The third method is purely market driven &8211; let the best market participant win, develop its IP and create standards &8211; and produces equally non-optimal results. One of the best examples of a market driven approach is the market dominance Western Union reached in the 19th century around the intellectual property it built and managed in early telecommunications and finance. The result limited competition and innovation until new organizations took wrestled the mantle of open standards for themselves and cooperated to create a more level playing field.

    The fourth method is a hybrid method that incorporates market and hierarchical vectors. This hybrid method is governed by a neutral body that drives towards consensus by involving all market participants while developing clear rules that all abide by.

    The key to success for a hybrid method are:

    1) Involve as large a network of stakeholders as possible

    2) Create a set of transparent rules and a framework to develop, manage and govern open standards so that no one party can distort and control the process

    3) Ensure that open standards are grounded, leverage the new technology, and deliver value to all professionals in a given field.

    4) Sustain involvement from industry participants through open collaboration going forward so that open standards and the body that manages and governs them is a living entity.

    Not developing open standards or developing sub-standard open standards has its downside. the absence of widely approved and appropriate system architectures means lack of interoperability, waste and duplicative efforts and eventually material delays in the widespread acceptance and use of a new technology.

    I posit that consensus ledger tech is at an inflection point. Get open standards right and this new technology will see accelerated adoption sooner than most thought leaders predicted. Miss the opportunity and we may experience disappointment for a while. This is especially important as consensus tech can and will be applied and used by more than one industry and for many use cases, and because each industry is the sum total of specific properties such as regulation, legal frameworks and business processes that have evolved specialized work flows and processes over time &8211; none more so than the financial services industry.

    To be more specific, any industry or business models that incorporates use cases that can benefit from peer to peer platforms, disintermediation, some level of de-centralization, transactional and data transparency, is poised to benefit from consensus ledgers. This means the capital markets, insurance and payments sectors within the financial services, marketplaces within the retail industry, social networks, media &8211; social and traditional &8211; higher education, data management in general &8211; data monetization and identity management &8211; to name but a few, are poised to benefit from consensus ledgers.

    Therefore, the wide adoption of consensus ledger tech is a function triangulating between and optimizing for regulatory concerns, existing legal frameworks, existing standards &8211; as developed for data, data handling, data messaging, data taxonomy &8211; and existing software and hardware engineering practices/standards, existing operating systems and existing industry needs ACROSS heterogenous industries. (One also needs to take into account existing payments systems and practices given and how these may interact with consensus ledgers.) Further, the development of open standards will invariably have an impact, through feedback loop mechanisms, on current and accepted ways of doing business as well as how these accepted ways are regulated and legally bounded.

    Additionally, and to add complexity to the mix, we are dealing with three competing stacks already and the inevitable interoperability issues that raises: a) ethereum, b) and c) ripple/stellar. This makes it even more crucial to arrive at agreeable top level open standards and avoid balkanization to the extent these stacks will co-exist, users may favor one or the other for specific use cases or more than one in other use cases.

    For these reasons, I strongly believe the hybrid path outlined above is the only optimal path. This path ensures a neutral body is empowered to develop and govern standards applicable to meta issues around consensus ledger tech stacks and interoperability. This does not mean such a body would rule over business logic, i.e. smart contracts, which industry incumbents and service providers would be free to collaborate or compete on depending on appropriateness and strategic goals.

    I note various entities have already raised their hands to tackle open standards &8211; for-profit organizations as well as not-for-profit organizations &8211; none of which, to my knowledge, have deep knowledge with managing open standards. I am outlining below who should, in my opinion, be asked to help with open standards for consensus ledgers as well as various paths to the creation of a new standards body.

    I see three options for the hybrid path. Either through the creation of a new ad hoc body or via an existing organization.

    As for the first option, we can use the example of the Internet Engineering Task Force, IETF, see here which was created in 1986 for the sole purpose of promoting voluntary internet standards. One could envisage a new task force, a truly independent one, without any ulterior commercial motives, to be created  with the participating of various stakeholders across industries and manned by professionals hired out of existing standards bodies. A very viable option in my opinion.

    As for the second option, it would be a derivative of the first one. The only difference being that a for profit organization would volunteer to seed such a body and allow itself to remain neutral and promote a truly open governance framework.

    As for the third option, I see only a handful of candidates that would be truly neutral, global and bring a breadth and depth of expertise in the field of standards creation, management and governance that all industry stakeholders would have no material objections. These are a) the Institute of Electrical and Electronics Engineers, IEEE, see here, which is a neutral and global body and has in its midst many software engineers and computer scientists; b) the International Organization for Standardization, ISO, see here, and the International Electrotechnical Commission, IEC, see here, which both have joined forces and created a joint commission, the ISO/IEC JTC 1 tasked with developing and managing standards in Information Technology, see here.

    As an aside, I believe bodies such as the International Organization of Securities Commissions, IOSO, see here, FpML see here, the Financial Industry Business Ontology, FIBO, created by the Enterprise Data Management Council, see here, have a role to play. I am sure other similar bodies in the payments or insurance sectors and outside of the financial services industry would be appropriate value add actors.

    My wish is for at least one of either IEEE, ISO or IEC to get involved with consensus ledger technology, or for a for-profit organization to create ad hoc framework with a neutral governance process to step forward. The latter would only be effective at a sector level, i.e. insurance or capital markets for example, thusly we may miss the opportunity to unify standards pan industry which may have negative implications from an interoperability point of view. Would the latter be such a suboptimal path I wonder? Practicality needs to be taken into account obviously and aspirations to boil oceans from the onset usually amount to little in the long run.

    Finally, the creation of open standards will also usher the material benefit of allowing the emergence of new tech stacks and/or facilitate the strengthening of existing ones (ethereum, ripple/stellar, bitcoin).

    Have I missed anything?

    FiniCulture

     
  • user 10:35 pm on May 9, 2016 Permalink | Reply
    Tags: , , , Futurism, Perils   

    How the Blockchain Can Avoid the Perils of Futurism 

    Is the community too focused on ? In this opinion piece one developer argues the answer is yes.
    fintech techcrunch

     
  • user 9:43 pm on May 9, 2016 Permalink | Reply
    Tags: , , , , , ,   

    How blockchains could change the world 

    Ignore ’s challenges. In this interview, Don Tapscott explains why , the underpinning the , have the potential to revolutionize the economy.
    McKinsey Insights & Publications

     
  • user 9:40 pm on May 9, 2016 Permalink | Reply
    Tags: , , , UserControlled   

    Is Blockchain the Key to User-Controlled Social Media? 

    industry startups are attempting to capitalize on a growing disillusionment with traditional platforms.
    CoinDesk

     
  • user 9:37 pm on May 9, 2016 Permalink | Reply
    Tags: , Parties, , , , , ,   

    SWIFT: Blockchain Won’t Remove All Third Parties in Securities Trade 

    The research arm of released a new report today which argues that replace all in .
    CoinDesk

     
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